Insights for advisers, by advisers

Crypto is set to dominate portfolios, are you ready?


A recent survey by Credit Suisse shows that a quarter of financial advisers have cryptocurrency assets in their clients’ portfolios. In addition, another 35 per cent have indicated that they will be including allocations to digital assets in the future.

The interesting thing is that financial advisers don’t seem to be shying away from digital assets and are actually keen on gaining cryptocurrency exposure through a vehicle such as an ETF.

What is concerning is that the mainstream financial advice industry is not equipped to respond to such enquiries from their clients. That is the conclusion of new findings from digital economy research firm Monochrome Research.

The research shows that “while a vast majority of Australian financial advisers have been asked about crypto assets in the last year, very few felt equipped to respond to client enquiries. Roughly 77 per cent of advisers in the last 12 months experienced Bitcoin and other digital assets coming up in client discussions, and yet only 18 per cent felt adequately equipped to respond to their inquiry,” according to Monochrome’s Financial Standard’s survey.

Monochrome Asset Management’s CEO Jeff Yew says, “Financial advisers need better educational resources about the digital assets space, to give them the ability and confidence in discussing the subject with their clients.”

Roughly 1.1 million Australians are exposed to digital assets. However, the $3.3 trillion superannuation industry has limited to access to this asset class because of its tight regulations.

“The space has grown rapidly, however the educational resources available to advisers have struggled to keep up, and it has resulted in a disparity in advisers’ knowledge on digital assets versus the enquiry from advisers’ clients,” says Yew. “More than three-quarters of consultants are receiving enquiries about digital assets and yet, a significant 82 per cent feel they are not able to adequately respond to the digital assets enquiries.”

Monochrome is a strong advocate for regulation but also insists that there needs to be an increase in the level of education and understanding about digital assets. It has developed part of the solution to this problem: Monochrome Research is operated independently of Monochrome Asset Management and will provide educational resources and objective findings from research in the digital assets space.

This body will curate relevant CPD-accredited content to inform and educate financial advisers and portfolio allocators, including SMSFs, on digital assets.

“There is an urgent need for better awareness and understanding of the breadth of variety in this sector and financial advisers can play a critical role in continuing to protect and grow the wealth and piece of mind of many Australians,” says Yew. The firm hopes that financial advisers will one day come to rely on Monochrome Research as an invaluable educational resource.

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